Tag Archives: ab1665

Performance, not weasel words, should drive California broadband subsidies

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The reboot of the California Advanced Services Fund (CASF) broadband infrastructure subsidy program continues, with a new round of comments and suggestions landing at the California Public Utilities Commission.

I drafted the Central Coast Broadband Consortium’s filing. One issue that the CPUC should consider very carefully is what qualifies as a bona fide service offer.

When the California legislature allowed lobbyists for AT&T, Frontier Communications, Comcast and Charter Communications to rewrite the law and turn CASF into their own, private piggy bank, the minimum broadband standard was lowered to 6 Mbps download and 1 Mbps upload speeds. If an incumbent “offers” such service, then the area in question isn’t eligible for an infrastructure grant.

The point we made is that…

In order for such an offer to be valid, an incumbent provider must be capable of actually delivering service at 6 Mbps download and 1 Mbps upload speeds (hereinafter, “6/1 service”) consistently to any household that subscribes to it. Although it is common industry practice to advertise service at a certain level and then condition it with a long and difficult to parse list of exceptions, there are no such exceptions in the statute. An incumbent is either capable of delivering 6/1 service to every household that subscribes to at least that level of service at all times, or it is not. If an incumbent is not capable of fulfilling an offer of 6/1 service, or better, at all times in any given census block or to any given household, then that census block or household is unserved.

An offer that can’t be fulfilled is not a offer at all. Incumbents should not be allowed to block independent projects on the basis of marketing claims or service that meets the minimum standard only some of the time. The 6/1 standard is ridiculously low to begin with. The least the CPUC can do is require incumbents to actually meet it.

CPUC approves FTTH grants, but says Frontier needs skin in the game

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Frontier Communications will get $2.7 million from the California Advanced Services Fund (CASF) for two fiber to the home projects. One is in the Imperial County towns of Desert Shores and Salton Sea Beach, and the other in Lytle Creek, in the mountains of San Bernardino County. The California Public Utilities Commission unanimously approved the subsidies at its meeting yesterday, and declined to add another $600,000 as demanded by Frontier.

At least for now.

The commission is in the middle of rebooting the CASF program, following the California legislature’s rewrite of the law that governs it. Lawmakers effectively transformed CASF from a source of independent and, to a degree, competitive broadband infrastructure financing, into a piggy bank for Frontier and AT&T. The language in the new law allows for 100% funding of broadband projects, but doesn’t require it. Commissioner Martha Guzman Aceves is in charge of making the changes, and she held out hope that Frontier could come back later and get the rest of the money. Commissioner Liane Randolph said that would be something to consider, but companies should share at least some of the costs…

I am supportive of both of these projects at the level currently recommended by staff. I’m open to – if there’s an opportunity in the future, if the criteria changes and there’s a procedural way that they can apply for more funds, but we would be approving these projects with the understanding that we would be approving them at 80 and 90 [percent] at this time. I think it’s important for the companies to have a financial participation in the project. They will eventually be able to earn a profit on this infrastructure.

As it stands, taxpayers will pick up the tab for 80% of the Lytle Creek project and 90% of the Desert Shores project. At that level, both projects will be turning a profit for Frontier within a handful of years, according to CPUC staff estimates. On the other hand, Frontier has threatened to not build anything at all if it has to invest its own money.

CPUC votes today on Frontier’s California cash grab

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Frontier Communications isn’t getting any sympathy yet from the California Public Utilities Commission. Commissioners are scheduled to vote this morning on grants for two southern California fiber to the home projects, in Lytle Creek, in the mountains of San Bernardino County, and Desert Shores and Salton Sea Beach in Imperial County. The subsidies would come from the California Advanced Services Fund (CASF).

You might think that Frontier would be happy with a gift of $2.7 million of taxpayer money, but it isn’t. It wants $3.3 million, which is the full tab for building the systems. Including the cost of buying customer premise equipment for customers who don’t exist – there are about 200 empty homes in the Desert Shores project area. Frontier claimed its household count was based on its own “its well tested methodology used extensively in broadband deployment”. Turns out Frontier’s “well tested methodology” involves using 2016 population figures, instead of the newer but, um, inconvenient data generated by the California finance department in 2017.

CPUC staff rejected Frontier’s arguments that the CPUC should pay for 100% of both projects, instead of the 80% and 90%, respectively, that’s currently proposed, saying…

Frontier has offered an interpretation of AB 1665 whereby every project is evaluated according to the unique set of criteria, chosen by the applicant, that will justify full funding for that project.

Assembly bill 1665 was passed by the California legislature and signed into law by governor Jerry Brown last year. The bill rewrote the rules for the CASF program, turning it into a private piggy bank for Frontier and AT&T, with some spiffs on the side for cable companies. It’s not surprising that Frontier thinks it can whack CASF with a hammer any time it’s running a little low on cash, but that’s the product of a seemingly limitless sense of entitlement, rather than a rational interpretation of the law.

So far, the give and take has been with staff. Commissioners will have the final say later this morning.

Frontier tells CPUC give us all the money!

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Frontier Communications isn’t happy with the bonus that California Public Utilities Commission staff wants to bestow on it. Instead, Frontier is demanding the CPUC pay the entire cost of two fiber to the home projects in outlying areas of California.

Frontier applied for two grants from the California Advanced Services Fund (CASF), one for $1.8 million in the San Bernardino County mountain community of Lytle Creek, and the other for $1.5 million in two towns – Desert Shores and Salton Sea Beach – in Imperial County. The applications asked the CPUC to pay 100% of the cost of the projects. The CPUC has always had the discretion to do that, but up until now has typically limited last mile infrastructure subsidies to 60% to 70% of construction costs.

When the California legislature rewrote the rules for CASF subsidies last year, it bowed to cash pressure from lobbyists for Frontier – as well as AT&T, Comcast, Charter and other big monopoly model incumbents – and turned the program into their private piggy bank. One change specifically – and unnecessarily – authorised the CPUC to pay for “all or a portion” of a project, based on an assessment of its worthiness.

So that’s what CPUC staff did when they evaluated Frontier’s applications, and drafted two resolutions for commissioners to consider at their meeting tomorrow. They recommend giving Frontier grants for 90% of the Desert Shores project cost and 80% in Lytle Creek.

That’s more than any other last mile project subsidised by CASF, but it still isn’t enough for Frontier. It filed objections to the staff proposal, essentially arguing that the CPUC is obligated to give them all the money.

Nonsense.

The CPUC’s job is to try to untangle the mess that lawmakers made last year when the CASF program was rewritten. That means developing a rational process for identifying and funding broadband projects in unserved and otherwise eligible areas of California, Frontier’s overwhelming sense of entitlement notwithstanding.

New digital literacy, broadband access grant program approved by CPUC

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The California Public Utilities Commission approved a new broadband promotion program at its meeting in San Francisco yesterday. Via the California Advanced Services Fund (CASF), the program will award grants for digital literacy training and community broadband access projects. Non-profit groups, schools, local governments and other not-for-profit organisations can compete for the $5 million initially available, with the first round of applications due on 31 August 2018.

There’s a fast lane – expedited review – for applications requesting grants of $100,000 or less, and that meet other specific requirements, such as serving a low income community and offering technical support. In addition, preference will also be given to projects that serve rural areas and/or people with “limited English proficiency” and “limited educational attainment”. Grants can pay for up to 85% of eligible project costs.

One knotty problem is evaluating the effectiveness of “broadband adoption” projects. Strictly speaking, adoption is a marketing metric, typically expressed as the percentage of people who buy a particular category of services or products. The obvious solution is to get subscriber data from Internet service providers, but that’s something that big ISPs, and particularly AT&T, do not want to do. They treat it as proprietary information. One possible work around is to sign non-disclosure agreements, and the CPUC will work on creating a standard one for grantees to use. But the CPUC isn’t requiring ISPs to participate, so it might not get very far.

The commission also made relatively minor changes to its existing grant program for public housing communities. It didn’t change its standards, though. Unlike other CASF-funded infrastructure projects, which have to offer at least 10 Mbps download and 1 Mbps upload speeds, facilities in public housing only have to deliver 1.5 Mbps down, with no particular upload requirement.

The new adoption program – $20 million total – was created by the state legislature last year, when it turned the lion’s share of CASF – more than $300 million – into a piggy bank for AT&T and Frontier Communications. Those new rules are still under development at the CPUC, with a final version expected by the end of the year.

CPUC urged to keep broadband promotion subsidies provider neutral

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Broadband promotion grant rules should have air tight guarantees that the money won’t be used to promote any particular Internet service provider. That’s the consensus of several organisations that reacted to a draft decision that would have the California Public Utilities Commission set up a broadband “adoption” program, subsidised by the California Advanced Services Fund (CASF).

As the new rules were being developed, big, incumbent ISPs argued, in effect, that they should be able to leverage the money to supplement their subscriber acquisition – aka sales – efforts. The first draft of the rules is a little ambiguous on that point. Although the money would flow through (presumably) non-profit organisations, partnerships with ISPs are encouraged. No one seems opposed with the idea of working with ISPs. After all, the goal is to convince more Californians to buy Internet access and join the online world. ISPs have to be part of the mix for that to happen.

But exclusive deals are something else again. Big ISPs such as AT&T, Frontier Communications, Comcast and Charter Communications don’t play well with others. As anyone who has watched the parade of sock puppets that the big carriers march into legislative hearings can tell you, when they can rope non-profits into working for them, they will. In its comments to the CPUC, the California Emerging Technology Fund (CETF) said Frontier wants to do exactly that…

Currently, CETF is being pressured by Frontier Communications to have CBO grantees for adoption outreach market only Frontier’s affordable offer. This is contrary to the role of a non-profit organization to educate a potential subscriber to all affordable offers available, and help choose the best one for his or her needs.

Most of CETF’s funding comes from Frontier and Charter these days, to run such subscriber acquisition campaigns in their territories.

The Greenlining Institute, TURN (aka the Utility Reform Network, aka Toward Utility Rate Normalisation) and the CPUC’s office of ratepayer advocates also pushed for clear language banning exclusive deals between grant recipients and ISPs. As TURN and Greenlining put it

The Commission should ensure that those partnerships do not require digital literacy programs to exclusively promote one Internet Service Provider’s services at the expense of competition and informed consumer choice. These program participants are exceptionally vulnerable in that they have been recently introduced to the internet and on-line environment and presumably have little to no knowledge regarding the various options and “players” in the marketplace. These consumers will likely be looking to these programs for guidance and advice on adoption options. These consumers should not be misled or otherwise given the impression that they do not have a choice for internet services through program materials, branding, or other marketing materials solely from the ISP partner that would likely be accessible during the grant- funded program.

Rebuttals, should there be any, are due next week. The CPUC is scheduled to make a final decision on 21 June 2018.

The complete set of CASF reboot documents is here.

California broadband subsidy law demands equal treatment for all, rich and poor alike

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One of the mysteries surrounding Californian subsidies for broadband infrastructure is the abysmally low standard that the California Public Utilities Commission imposes on the people who live in public housing, and only on them. The thicket of laws that govern the California Advanced Services Fund (CASF) initially set aside $20 million to pay for broadband facilities in public housing communities, with the possibility of adding more when it runs out.

The CPUC is in the middle of rebooting the CASF program, after the California legislature added to the mess by turning the general infrastructure subsidy program – with $300 million in new money – into a piggy bank for AT&T and Frontier Communications. In the process, it’s freshening up the rules for improving broadband access in public housing.

The first draft of the new rules keeps the minimum service speed for subsidised public housing broadband facilities at 1.5 Mbps for downloads, with no requirement at all for uploads. That contrasts with the 6 Mbps down/1 Mbps minimum that the CPUC (and the legislature) thinks is good enough for everyone else. It isn’t, but that’s a separate barrel of pork.

The draft rules justify digging a deeper digital divide by declaring subsidised broadband in public housing is “not intended to replicate the robust level of connectivity of a commercial provider”. The problem with that, as pointed out in comments filed yesterday by the Central Coast Broadband Consortium, is that the language of the law – sausage though it may be – sets the same standards for everyone…

Because 1. An unserved residence is one where service at 6 Mbps download and 1 Mbps upload speeds is not available, 2. Grants for broadband infrastructure projects in Public Housing may only be made to an unserved residence, and 3. The purpose of all CASF infrastructure projects is to raise the service available to all Californians above the statutorily defined unserved threshold, we must conclude that it would be illegal to fund an infrastructure project, of any kind, that did not provide service at 6 Mbps download and 1 Mbps upload speeds or better.

The CPUC is due to vote on the changes at its 21 June 2018 meeting.

The complete set of CASF reboot documents is here.

I drafted and filed the Central Coast Broadband Consortium’s comments. I’m not trying to feign impartiality. Take it for what it’s worth.

Correction: an earlier version of this post contained a typo. The minimum speed that CASF-subsidised broadband projects in public housing communities must “provide residents with” is “1.5 mbps per unit”, not 1 Mbps per unit. The fault is mine and it’s been corrected above.

CPUC offers plan to increase Internet use in communities that need it most

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Disadvantaged communities are first in line for broadband education, marketing and access grants subsidised by the California Advanced Services Fund (CASF) in a draft plan to implement a new “adoption” program run by the California Public Utilities Commission. The proposed decision, by commissioner Martha Guzman Aceves, also tweaks existing subsidies for broadband service and promotion in public housing communities and winds down a defunct infrastructure loan program.

Two kinds of adoption projects will be funded: digital literacy – i.e. training and marketing – efforts and broadband access programs that offer free Internet access and computer centers.

The proposed rules favor big projects. Grant proposals up to $100,000 will get expedited treatment – staff can say yes or no, without spending months on a formal vote by commissioners.

The draft has a simplified checklist that CPUC staff will use to rank proposals. Communities where annual median income is at or below $49,200 or where half the residents have limited English ability or have “only a high school diploma or less”, or have “some other demonstrated disadvantage which affects broadband adoption” will get priority. So will rural areas and projects that have community support and/or partnerships, and offer low or no cost Internet access.

The big telephone and cable companies wanted these programs to be tilted in their direction. Frontier thought those programs should be linked to its CASF-subsidised infrastructure projects, while the lobbying front for Comcast and Charter Communications – the California Cable and Telecommunications Association – gushed over the idea that grants should be tied to “partnerships” with incumbents, albeit non-exclusively. Guzman Aceves rejected Frontier’s cash grab, and broadened the allowable range of partnerships to include local community groups, non-profit and for-profit companies and any “other applicable organisation”. Incumbents can still play, but they don’t get a privileged position.

The public housing program was left largely unchanged. Cable company lobbyists failed to insert additional roadblocks. Service levels for subsidised broadband facilities in public housing communities are still pitifully poor, with a minimum download speed of 1.5 Mbps and no standard at all for upload speed.

The draft also closes down the broadband infrastructure loan program, which was scrapped by the legislature last year. Existing loans will continue as is, and the two pending loan applications will be converted to grants.

The schedule calls for the CPUC to vote on the proposed decision at its 21 June 2018 meeting, with the first round of applications accepted on 1 July 2018. Comments on the draft are due on 7 June 2018.

The complete set of CASF reboot documents is here.

CPUC posts proposed new rules for Internet adoption, public housing broadband grants

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This morning, commissioner Martha Guzman Aceves released a draft plan for giving out grants to broadband adoption programs, revising an existing grant program that pays for broadband facilities in California’ public housing communities, and winding down a defunct broadband infrastructure loan account. You can read it here:

Proposed decision by commissioner Martha Guzman Aceves, implementing CASF broadband adoption program and modifying the CASF public housing broadband and infrastructure loan programs, 18 May 2018

You can find the background documents here.

I haven’t read through it all yet, so I’ll reserve comment until Monday. Enjoy your weekend!

Pay top dollar for low speed broadband, CPUC told

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The counter punches landed at the California Public Utilities Commission yesterday, as nine organisations filed rebuttals to previous comments about how the California Advanced Services Fund (CASF) should be run. The broadband infrastructure subsidy program is undergoing a complete make over, thanks to last year’s assembly bill 1665, which lowered California’s minimum broadband speed standard and turned the fund into a piggy bank for AT&T and Frontier Communications.

The Central Coast Broadband Consortium’s reply, which I drafted and submitted, led off with a correction – I got the math wrong on service level weightings. We recommended using the Federal Communications Commission’s discounting criteria, which is based on download/upload speeds and latency, for determining how much of a project is subsidised. The corrected table is below.

That proposal drew fire from AT&T. It wants full funding for low speed, 10 Mbps down/1 Mbps up wireless service, claiming it “provides capabilities that are more than sufficient to meet the broadband needs of a typical household, even with multiple simultaneous users”. Sure. So long as that typical household hasn’t bought a new television recently. Half of U.S. homes will have a 4K set by the end of next year, well before AT&T completes any CASF-subsidised upgrades. Those require at least 15 Mbps of steady service just to watch one 4K program.

Likewise, the California Emerging Technology Fund (CETF), which sponsored AB 1665 and successfully lobbied governor Jerry Brown to sign it, scoffed at the idea of basing CASF subsidies on infrastructure quality and performance, comparing it to rearranging deck chairs on the Titanic.

Thus spoke the iceberg.

CETF and AT&T phrased it differently, but both arguments lead to the same conclusion: lock rural California into slow and unreliable service – insufficient even by today’s standards – for decades to come. That’s not good enough. If service providers get public subsidies, they should build what all Californians need, now and tomorrow.

The full list of CASF-related comments and reply comments is here.